Is GM Being Blamed Too Aggressively?
NEW YORK ( MainStreet) The New York International Auto Show began this past week, and the biggest star was the CEO of GM, Mary Barra - who took the company helm last December. But the attention was not because of the new automobile models on display.
It was because of GM's past faulty workmanship, which caused a safety defect - faulty ignitions that shut off power to the car. This loss of power caused the driver to lose control of the vehicle which, in some cases, led to fatalities.
While GM is the main culprit and bears full responsibility for its actions - there are some questions as to the responsibility of others. The government of the United States bailed out GM in 2009. The company was going broke - in part precisely because it produced a substandard product. The Obama administration engaged in controversial bailout scheme and GM became born again.
Because GM went bankrupt in June 2009, the company is no longer liable for the claims of victims that were caused by the faulty ignitions before then. This is seen as an injustice to some.
But what about the National Highway Traffic Safety Administration (NHTSA)? There is evidence that the agency ignored warnings about the ignition switch problems.
As the Safety Record, a nonprofit, consumer safety organization in Massachusetts, said, we should be most "most interested in understanding why NHTSA declined to investigate the defective ignition modules in early model year Chevy Cobalts and other models, after two Special Crash Investigations, 29 complaints, four deaths and the considered opinion of Defects Assessment Division (DAD) Chief."
The Safety Record also indicated the organization has "long observed that we can find no 'discernible trend' in NHTSA's investigation decisions." The Safety Record even went so far as to submit comments directly to the NHTSA, including the follow:
- The NHTSA uses an unstructured process for determining defects and inconsistent or nonexistent criteria for initiating defect investigations.
- The NHTSA makes poor use of available data and refuses to consider information from sources outside the agency or the manufacturer.
- The NHTSA focuses on defects that are easily and inexpensively remedied, frequently ignoring more complicated and dangerous defects.
"Shareholders are not on the hook for liability. When the government took over Fannie and Freddie they also took over the management," said Andrew Kloster, a legal fellow at the Heritage Foundation, Washington, D.C. "This was not the case for GM."
But should some of the liability go to the feds?
"As far as NHTSA is concerned, they too are not involved in the management of GM," Kloster said. "The only question is if they were told to not investigate GM."